Deputy Attorney General Rod Rosenstein shared the details of a new Foreign Corrupt Practices Act ("FCPA") Corporate Enforcement Policy. In remarks before an international conference on the FCPA, Mr. Rosenstein said that the new policy will bolster the DOJ's ability to recognize and address corporate criminal conduct. In addition, he said that the new policy will provide greater clarity for companies with regard to the benefits of voluntarily disclosing misconduct.
After emphasizing the importance of providing incentives for companies to engage in ethical corporate behavior, Mr. Rosenstein stated that the new FCPA policy will outline the costs and benefits of cooperation. The policy will include specific definitions of voluntary disclosure, full cooperation, and timely and appropriate remediation. He said that the new policy will also explicitly state that, when a company satisfies those three standards (disclosure, cooperation and remediation), it can expect a "presumption that the [DOJ] will resolve the company's case through a declination," unless certain aggravating factors are present (e.g., if the offender is a repeat offender or the offense is particularly serious). He cautioned that companies that get a declination will still be required to pay disgorgement and/or forfeiture – continuing a trend seen in a number of cases during 2017. For companies that fulfill the aforementioned standards, but still face an enforcement action due to aggravating factors, the DOJ will recommend a 50% reduction of the financial penalty. Further, he noted, there will be benefits available for companies that fail to voluntarily self-disclose, but still fulfill the cooperation and remediation standards.
Mr. Rosenstein stated that the new policy will also include details on the DOJ's expectations for effective compliance and ethics programs. He said that the policy will be added to the U.S. Attorney's Manual. He pointed to the disparate outcomes of recent enforcement actions as evidence that voluntary disclosures produce favorable results and suggested that the new policy should incentivize responsible corporate behavior. Mr. Rosenstein concluded by urging companies to be cautious when choosing business partners and to ensure an appropriate level of oversight.
Commentary / A. Joseph Jay
The new FCPA Corporate Enforcement Policy appears to make permanent and expand the FCPA Pilot Program which encouraged corporate voluntary disclosure. The policy – and the pilot program which it enhances – are efforts to curb corporate criticism and skepticism about how the Department enforces the forty year-old law. And while the new policy is expected to incentivize corporations to "do the right thing" in terms of voluntary disclosure, full cooperation, and timely and appropriate remediation, it emphasizes that the Department will continue to focus on criminal prosecutions of individuals, as well as more "horrific" crimes. The new policy announced by the Deputy Attorney General will further detail how the Department will evaluate corporate compliance programs by providing "the hallmarks of an effective compliance and ethics program." Corporations and financial institutions should ensure that their compliance programs meet the benchmarks to be set by the Department.
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